Can someone explain why other users can't open *chm file? Is it necessary to have RoboHelp installed to open *chm file?
No, you do not need RoboHelp installed to view CHM files. However, CHM is usually blocked in newer Windows versions and especially, when the CHM is hosted on a network drive/server. There are many discussions around it, as you will find with a quick Google search.
My suggestion is, to think about publishing to the much more modern Responsive HTML5 output with RoboHelp.
Hopefully Stefan won't mind a bit of clarification here.
CHM files aren't typically blocked on Windows as a default. As RoboHelp is a help authoring tool, certainly CHM is among the possible output types it creates. Many application developers create tools that supply help for the tool in a CHM format. For example, at one point, RoboHelp itself provided CHM as its own help.
As such, typically the RoboHelp developer provides a CHM to an application developer to include in the installation package. And when the application (such as RoboHelp) is installed, the CHM file is installed as well. So when the user needs help, they perform whatever steps they usually perform to summon help (pressing F1, or clicking a Help menu or whatever) and the CHM file opens with no further issue. Windows knows what a CHM file is and it just opens it up! No blocking issues whatsoever.
Now as Stefan indicated, if you copy that CHM file to a network drive and try to open it while it's parked on that network drive, the CHM will typically not open, as that would be a security risk. Microsoft can explain why it's deemed to be a risk. So accessing it from a LAN is a bust unless you jump through some extensive hoops and make special registry hacks to allow it and so on.
Likewise, if you download a CHM file from a web site, the Windows operating system will open the CHM up, but will refuse to show you much of anything inside it unless you take steps to assure Windows the CHM is actually safe by taking specific and deliberate steps to "unblock" the CHM file.